Daley Weekly: Our Newly Fearless Leader

Cuba

Where has this guy been?

On Wednesday President Obama hit the reset button on U.S. relations with Cuba. After fifty years of U.S. arm wrestling with the Castros to no avail, he announced that relations would be “normalized.” An embassy would be established.

Additional changes to travel and trade restrictions will apparently follow over the next few months as Obama moves to unravel this failed policy. Watch for a stream of Florida-based Castro haters heading back to Havana to visit the cousins they have never met.

The opponents were quick to defend the existing policy – something that has brought about no change for the better in Cuba whatsoever.

Much of the opposition focused on the prisoner trade – Cubans who were implicated in the downing of two anti-Castro private planes were swapped for aid worker Alan Gross and a U.S. spy named Rolando Trujillo who had been feeding info to the U.S. about Cuban operatives here. The Cubans also agreed to release 53 political prisoners.

Let’s note that the announcement of the new policy was made possible by this swap, but clearly the Administration had been preparing the change for some time. Discussions about the normalization of relations began eighteen months ago in Canada. The Pope has been involved. The prisoner exchange was a sidebar.

Marco Rubio, Florida Republican Senator of Cuban descent, railed against the President for “coddling dictators and tyrants.” The fulminations from Ted Cruz  (R-Texas) are yet to come. Not all the opposition was Republican. Senator Bob Menendez (D-New Jersey), outgoing Chair of the Foreign Relations Committee, also took umbrage.

The big change – it looks like the Internet will be coming to Cuba. This means that eventually the regime there is toast. A widely informed Cubano population will not let things stay as they are. We can all speed things along by “friending” Raul Castro on Facebook.

Those who visit Cuba will be able to use credit cards to purchase as much as $100 in cigars and rum, another real plus. Maybe the Mariners can find a truly outstanding third baseman without the guy having to ruin his hands paddling over here in a rowboat.

This is a good, bold move by Obama. Following his executive action on immigration, might this signal that the President is becoming more – Presidential?

The Last Dance

After passage of the omnibus appropriations bill, outgoing Majority Leader Harry Reid (D-Nevada), kept the Senators in town long enough to confirm 24 of the Administration’s nominees and to pass (sigh) the tax extenders bill. Some of the confirmations were controversial. The anti-gun gang opposed confirmation of Vivek Murthy to be Surgeon General because of comments he made about gun violence being a health problem.  They also confirmed Sarah Saldaña, to be Director of the United States Immigration and Customs Enforcement agency and Antony Blinken to be Deputy Secretary of State.

They passed the tax loophole extenders bill with only 16 negative votes. After the President threatened to veto efforts to make some of the most awful of these loopholes permanent, the bill simply took about 50 of them and extended them for a year.

One good consequence of this is that it makes impossible Republican attempts to give permanent tax breaks away this year. They wanted to do them now so that they would not have to account for them in the deficit-expanding tax reform bill they are planning for next year. Nevertheless, this bill reveals the hypocrisy of the anti-deficit mob. See an analysis by Citizens for Tax Justice: “Even at One-Tenth the Size of Previous Tax Deal, House Extender Bill Is a Giveaway for Corporations.”

Feckless Economics

The New York Stock Exchange had its best two days in history. U.S. job and GDP growth continued to exceed expectations. In Russia, Putin did an interview to explain why the Ruble was in freefall and the economy headed into a serious recession. It was not his fault – the “mistakes were made, but not by me” mantra. Do you recall that John McCain (R-Arizona) went onto the floor of the Senate to call the President’s policies “feckless?”

Cyberwar

With Congress gone, beltway insiders filled the air with reactions to the decision by Sony Pictures not to release a movie – “The Interview” – that portrays a fictional plot to assassinate dictator Kim Jong-un.  Apparently the movie’s pending release led to a hacking of Sony’s computers with retaliation threats from North Korea. The teasers for the movie make it look like “Dumb and Dumber do Pyongyang.” How is it possible that such nonsense has become a serious foreign policy dispute?

Beneficial Ownership

Remember this issue? It has to do with the fact that a corporation can be registered by a state without having to identify who actually owns the company. This creates a “shell corporation” that can create a subsidiary someplace and then pass money around without anyone being able to trace it. These shell corporations have been used to avoid taxation, launder terrorist money, commit fraud, and bilk seniors.

The European Parliament is moving forward a plan to require its member countries to collect information on the natural persons who actually own or control companies. The information is to be placed in a central registry where it will be available to law enforcement.

The U.S. is rated as being the easiest place in the world, next to Kenya, to create a shell company. Legislation to require collection of beneficial ownership information in the U.S. has been bottled up in committee in the Congress by opposition from the National Association of Secretaries of State.

Everything you ever wanted to know about the consequences of this campaign by the Secretaries to hide crime from detection can be found in a report prepared by our friends at Global Financial Integrity.

Medicaid Expansion

A new effort to expand Medicaid is being pushed by business interests in Florida. Tennessee has approved an expansion. True, these plans play like they are a non-governmental approach but what they really do is add a costly and useless new layer between the government and the insurance program. Nevertheless, the expansions are important to the health of millions of low-income adults.

Just for fun, let’s note an article in the New York Times showing how Medicaid is growing even in state that have not opted for expansion – an overall increase so far of 6.8 percent, or about 1.5 million people nationally. Enrollment is up 13.4 percent in Idaho, 12.9 percent in Georgia and 12.4 percent in North Carolina.

ACA

About 2.5 million new customers have bought into exchange insurance products in the second year’s open enrollment.

D.C. Rumors

A couple of interesting rumors about where important legislative projects will go as some members of the Senate retire. The departure of Senator Carl Levin (D-Michigan) has left advocates wondering who might take up Levin’s effort to cut offshore tax loopholes. It looks like this mantle will be donned by Senator Sheldon Whitehouse (D-Rhode Island), Senator Tom Harkin’s (D-Iowa) efforts to expand opportunities for retirement security will be taken up by Senator Sherrod Brown (D-Ohio).

Schedule

The Congress is going to return in its new guise on January 6. In spite of the trauma that this prospect might produce among many of our friends, Christmas and the New Year will be celebrated at the usual times. Merry Christmas everyone.

Making Ends Meet: The High Cost of Child Care

What does it take to make ends meet?

For workers making less than $15 an hour – which is about 40 percent of all workers in the United States – housing, food, and transportation are all major expenses. But for a working parent with young children, one of the biggest expenses is likely to be child care.

For minimum wage workers, the cost of child care is an impossible burden.

The cost of child care for a school age child and a toddler is equal to more than 65 percent of a full-time minimum wage worker’s earnings in the 10 states included in the Alliance’s November 2014 report, “Equity in the Balance,” and is over 100 percent of their earnings in Colorado, Virginia, Connecticut, and New York.

When working parents don’t have a family member or friend who can look after their children for free or low cost, they have to pay for reliable child care. Although child care workers are among the lowest paid workers, earning a median wage of only $9.38 per hour in 2012, the cost of child care for parents is significant.

In the 10 states included in the Alliance’s 2014-2015 Job Gap Economic Prosperity Series, child care costs make up a large portion of the cost of living. In states we studied, paying for before-and-after- school and summer care for a 6-8 year old ranges from $3,440 per year in Idaho to $8,347 per year in Connecticut.

For a toddler, the cost of full-time child care ranges from $6,430 per year in Idaho to $13,844 in Connecticut. When parents have two children, nearly every state studied has a cost of over $10,000 per year, with New York (not including New York City) and Connecticut costing over $20,000 per year. (See chart at end of article).

While it’s true that many minimum wage workers are eligible for subsidized child care, a 2012 brief by the U.S. Department of Health & Human Services estimated that only 18 percent of children from eligible families actually received subsidies.

Further, only one state in the country currently has child care subsidy rates set at the recommended 75 percentile of market rates in 2014. Only three more have their rates set to the 75 percentile of 2013 market rates.

Because the most states allow providers to charge parents the difference between the subsidy rate and their standard rate, many parents who receive subsidies still must pay more than the subsidy co-pay, cutting deep into the already meager budgets of minimum wage workers.

In addition to the struggle minimum wage workers have affording child care, many states have restrictions on receiving subsidies when a worker loses their job or when they are unemployed and looking for work.

As the National Women’s Law Center shows, five states cut off subsidies after a parent loses their job, and another seven provide less than one month of subsidy after job loss. Further, 35 states and the District of Columbia do not provide any subsidies when a parent is unemployed, but actively searching for work.

When parents lose a job or only earn minimum wage, the cost of child care can be an insurmountable obstacle to making ends meet. A higher minimum wage can help workers across the country better afford the cost of child care. At the same time, addressing the high cost of care – while also ensuring that child care workers earn enough to support themselves and their families – would help families across the country.

Over the next few months, the Alliance for a Just Society will be taking a look at some of the components that go into calculating a living wage, and show why it’s impossible to make ends meet working full-time at minimum wage.

Child care chart

Daley Weekly: Lame Duck Session More Reaction Than Action

Lame Duck
The Congress returned December 1 for two weeks. What are they doing with all this time?

The House is setting its collective hair on fire over the President’s Executive Order on Immigration. There are hearings in at least two committees to hammer away against the Obama “Kingship.”  There is a bill in the works to repeal all the President’s deferred prosecution, including for Dreamers. On Thursday the House voted to pass this legislation, known as the Yoho bill, by a vote of 219 to 197, an almost totally party line vote.

They may have reached a deal on appropriations that has them passing and omnibus appropriations bill to fund the government for a whole fiscal year.

Apparently the Republican Leadership may want to get this out of the way. The Homeland Security appropriations will run only until March in order to give the anti-immigrant bunch an opportunity to take another shot at the Administration. No government shutdown.

In case you were wondering, the term “lame duck” does not refer to the session but to the people conducting the session – elected officials whose terms are about to expire and who are not going to be back. Apparently the term originated in the 18th century as an allusion to stockbrokers who were unable to pay their debts.

Tax “Extenders”

After playing around with this for the better part of a year, the “extenders” apparently will pass in some form making a bunch of loopholes available for another year. House and Senate lists differ on which to include but they should close these differences quickly. This follows an attempt to pass a “compromise” that included not only an expanded list of “extenders,” but tried to make a number of them permanent. Progressive tax groups made their displeasure known and the President threatened a veto.

So it looks like they have settled on a short term fix. The Democrats in the Senate had apparently agreed to the now ignored “compromise.” If this is the Democrat’s strategy, be prepared for hard times ahead.

Police Body Cameras

The police officer who choked to death an unarmed black man on Staten Island was exonerated by a grand jury. The coroner had called it a homicide.

The President did take a stronger personal role in the matter of blacks and the cops by calling for cameras on police flack vests.

The problem is that the persistent poverty, discrimination, unemployment, poor health, bad schools, and hopelessness in people of color communities will not be solved by cameras on cops. It needs something like a domestic Marshall Plan and the politicians who have been in the ascendency are more interested in feeding cash to the corporations and the wealthy than they are in dealing with the quality of domestic society.

Economy

The U.S. economy added 321,000 jobs in November and there is evidence of regional improvements in consumer spending. The unemployment rate held at 5.8 percent. It remains to be seen whether or not the Democrats will be emboldened to resist another round of Congressional efforts to cut taxes, reduce critical spending, fight immigrants, and perpetuate inequality – the long list of discredited austerity programs that the Republican majority is sure to try to enact.

Medicaid

A committee appointed by Texas Governor Rick Perry has recommended that Texas join in the Medicaid Expansion. It looks like the state of Wyoming is coming to its senses, too, and is trying to figure out how to participate in expansion. Rumors abound that deals also are in the works in Montana and Idaho.

Pretty soon we will look at the map of non-expansion states and see the modern manifestation of a racist, slave-owning South.

Ebola

The mad scramble to contain Ebola may finally be showing some hopeful signs. There now are empty treatment beds in Liberia, which was hardest hit. Efforts to prevent its spread into Europe and the U.S. also appear to be holding. Sierra Leone has now become the new hot-bed of Ebola infection.

The appropriations bill now working its way through the U.S. Congress includes $5.3 billion to fight the Ebola epidemic.

Health Care Cost Slows

One of the big causes of the push for austerity economics has been the inexorable cost push in the health care sector of the economy. Austerity freaks should be cheering and dancing. In 2013 spending on health care grew at the lowest rate since 1960, the lowest on record.

You can read all about it in Health Affairs: http://content.healthaffairs.org/content/early/2014/11/25/hlthaff.2014.1107.full.pdf+html.

Tax Reform – the Myth

One of the things that the pundits suggest as a potential point of agreement between Obama and the coming Republican Congress is something they call “tax reform.” Here are two myths to watch out for:

Revenue Neutral. Even though it is patently obvious that the great give-away of tax loopholes to the rich and corporations has caused an enormous drain from the national treasury, the mantra is that reform should be “revenue neutral.”  That means that every cut that they make for the corporations needs to be balanced by some increase somewhere else.

In order to make it easier to do this, the House Republicans have tried to maximize the cuts being provided in the “extender” package they are pushing in the lame duck session. The more they permanently reduce taxes for the corporations on the extender bill, the less it costs them when they try to produce “revenue neutral” tax reform that cuts the rates for the corporations. Cut a bunch of rates now, without paying for them, and we will not have to account for them in the score for tax reform next year.

The other thing that they are proposing to use to find a “revenue neutral” plan is a little thing called “dynamic scoring.”   This is a purely ideological theory that says tax cuts actually produce tax revenue. Yep – cut those taxes and the economy will grow and more money will roll in and everything will be rosy. The trouble is that it doesn’t work and the experts at the Congressional Budget Office have refused to use it.

But next year the voodoo economics gang will be in charge and they are preparing to rattle a few beads over the national economy and, presto, we can cut the hell out of corporate taxes. Deficit hawks should be shuddering.

The U.S. Has the Highest Corporate Tax Rate in the World. This little myth is a media favorite. It says that, because the law sets a 35 percent top corporate tax rate, we have the highest corporate taxes. The problem here is that corporations simply do not pay this rate.

Here are some key findings from a study done by Citizens for Tax Justice:

  • “As a group, the 288 corporations examined paid an effective federal income tax rate of just 19.4 percent over the five-year period — far less than the statutory 35 percent tax rate.
  • Twenty-six of the corporations, including Boeing, General Electric, Priceline.com and Verizon, paid no federal income tax at all over the five-year period. A third of the corporations (93) paid an effective tax rate of less than ten percent over that period.
  • Of those corporations in our sample with significant offshore profits, two thirds paid higher corporate tax rates to foreign governments where they operate than they paid in the U.S. on their U.S. profits.
  • These findings refute the prevailing view inside the Washington, D.C. Beltway that America’s corporate income tax is more burdensome than the corporate income taxes levied by other countries, and that this purported (but false) excess burden somehow makes the U.S. “uncompetitive.”

Check it out: http://www.ctj.org/corporatetaxdodgers/sorrystateofcorptaxes.php.

Musical Chairs

In addition to having to get a new Attorney General confirmed by the Senate, Obama now has to get a new Defense Secretary. Every time the President needs something out of the Senate he is made more vulnerable to the extortionists. Obama apparently will nominate former Deputy Secretary of Defense Ashton Carter to Defense. John McCain likes him, so maybe everything will be O.K.

Schedule

The Congress is supposed to end its lame duck session next week and re-convene with its shiny new majorities on January 6.  

Testimony: A Living Wage Is about Family Prosperity

Yesterday I got the chance to testify to the Washington state House Labor and Workforce Development Committee.

Our living wage research findings set a standard, that mere survival is not an adequate measure of a healthy society, and not an expectation we should be striving to set. It’s about a living wage that positions families to build for the future and realize their dreams. Read more